Shares of Nissan Motor Co. Ltd. NSANY gained 2.61% to close at $20.83 on Dec 14, driven by an overall increase in the market. However, the automaker announced that it will recall 34,000 Rogue 2015 models owing to a defect that can lead the sport utility vehicle to suddenly shift out of the park position.
Nissan thinks that the problem is due to a faulty shift selector knob which lets the Rogue relocate from the park position even when the brake pedal is not depressed. The vehicles covered under this recall were produced over the period Feb 10 through May 13, 2015.
The automaker will inform buyers of the affected vehicles about the defect later this month. These vehicles will be repaired by dealers free of cost.
Recalls have become a frequent phenomenon for automakers in order to ensure the safety of their vehicles. However, frequent product recalls not only reduce consumers’ confidence in a brand, but also add to expenses.
In Sep 2015, Nissan announced the recall of nearly 328,000 vehicles in North America to adjust a problem in the control panel. Of these, 300,000 vehicles are in the U.S. and 28,000 are in Canada. The recalled vehicles include the Nissan Versa sedan of model years 2012–2015, Versa Note of model years 2014–2015, and Micra vehicles of model years 2014–2015.
Nissan is recalling these vehicles as their center console's lower trim panel tends to come in the way of the driver's right foot and hence, may affect pedal operation, including brake application.
Other automakers, including Ford Motor Co. F, have announced frequent recalls. This month, the company announced that it will be recalling 451,865 vehicles, which include 411,205 in the U.S. These vehicles are being recalled due to a problem in the fuel tank, which may crack and leak gasoline, leading to a fire. The vehicles covered under the recall mainly cover 2010–2011 Ford Fusion and Mercury Milan models. These vehicles were manufactured over the period 2008–2011.
Nissan currently carries a Zacks Rank #2 (Buy).
Other favorably ranked automobile stocks include General Motors Company GM and O'Reilly Automotive Inc. ORLY, both carrying a Zacks Rank #2.
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